SIREN – WSJ lead editorial, “The e GOP's Payroll Tax Fiasco: How did Republicans manage to lose the tax issue to Obama?”: “[W]e wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest. The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play. Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter … Their first mistake was adopting the President's language that he is proposing a tax cut rather than calling it a temporary tax holiday. People will understand the difference—and discount the benefit. …

“Senate Republicans say Mr. Boehner had signed off on the two-month extension, but House Members revolted over the weekend and so the Speaker flipped within 24 hours. … At this stage, Republicans would do best to cut their losses and find a way to extend the payroll holiday quickly. Then go home and return in January with a united House-Senate strategy that forces Democrats to make specific policy choices that highlight the differences between the parties on spending, taxes and regulation. Wisconsin freshman Senator Ron Johnson has been floating a useful agenda for such a strategy. The alternative is more chaotic retreat and the return of all-Democratic rule.”

Story Continued Below

--A TOP DEMOCRAT EMAILS: “Boehner has lost the WSJ ed board. The only question now is, how quickly does the Speaker wave the white flag.”

--PUNDIT PREP – Speaker Boehner op-ed in USA Today, p. 9A, “Mr. President, call on Senate to save tax cut deal”: “Washington doesn't get to punt on this one. … [T]he House has voted to begin a formal conference committee to resolve the differences between the House and Senate bills. There's nothing unusual about this. This is the system our Founders gave us. … When hardworking taxpayers have work to finish, they don't knock off early. They stay and get the job done. Let's follow their example and come together to do the right thing for our economy and our country.” http://usat.ly/sn3LIR

OBAMA: #WINNING – Glenn Thrush and Jennifer Epstein: “Obama has already delayed his vacation four days -- he was scheduled to fly [to Honolulu] Saturday, [but] First Lady Michelle Obama and their two daughters left without him. … [T]he time between now and Jan. 1 … could redefine the 2012 race. ‘The president couldn’t have asked politically for a bigger gift at Christmastime than how these Republicans are behaving in the House,’ says Bob Shrum.” http://bit.ly/twyipR

--TRENDING ! #40dollars, the White House hashtag representing the average weekly value of the tax cut, was trending worldwide on Twitter yesterday afternoon/evening.

--A White House official emails: “At 4 p.m., an email was sent from David Plouffe to the White House list, and on Facebook and Twitter we asked: What does $40 mean to you? The response was overwhelming. We have received over 10,000 submissions through a form on Whitehouse.gov, averaging over 2,000 an hour and coming in from every state in the nation. On Twitter, we asked ‘What does #40dollars mean to you?’ The White House started the hashtag #40dollars. By 4:40 p.m., the hashtag #40dollars was trending on Twitter, not just nationwide, but worldwide.

“Through the official White House twitter account (@WhiteHouse with 2.6 million followers) we retweeted the stories from Americans across the country. Data is still incomplete, but #40dollars has been used in over 1,000 tweets and counting, and that based on the latest report from Hashtracking.com generated 5.7 million impressions and reached an audience of nearly 3 million people. On Wed, a random selection of 100 people who submitted their stories will be invited to a conference call with Brian Deese, Special Assistant to the President and Deputy Director of the National Economic Council to further discuss how not extending the payroll tax cut will impact them.”

PRESIDENT OBAMA, walking in on Jay Carney’s briefing: “Hello, everybody. Sorry to interrupt.”

MR. CARNEY: “All yours, sir.”

THE PRESIDENT: “Thank you. … Right now, the bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on January 1st. It’s the only one. All of the leaders in Congress -- Democrats and Republicans -- say they are committed to making sure we extend the payroll tax cut and unemployment insurance for the entire year. … So a one-year deal is not the issue; we can and we will come to that agreement, as long as it’s focused on the payroll tax cut and unemployment insurance and not focused on extraneous issues. The issue right now is this: The clock is ticking; time is running out. And if the House Republicans refuse to vote for the Senate bill, or even allow it to come up for a vote, taxes will go up in 11 days. I saw today that one of the House Republicans referred to what they’re doing as, ‘high-stakes poker.’ He’s right about the stakes, but this is not poker … Right now, the recovery is fragile, but it is moving in the right direction. Our failure to do this could have effects not just on families but on the economy as a whole.”

THE BIG IDEA – David Rogers: “[T]o hear Speaker Boehner tell it on [‘Meet the Press’ on] Sunday, Obama has already agreed to all but a minor portion of the savings proposed by the House in its $200 billion-plus bill. … But … left out of the whole GOP analysis is the fact is that the administration only made some of these offers in the context of budget talks in which it was also asking Republicans to agree to more revenues … [A] closer review of the House bill … suggests the areas of real agreement are closer to 60 percent, not 90.” Story, with charthttp://bit.ly/vSbLqK

CHARLIE HURT: “Democrats finally find a tax cut they can abide, and so both sides agree to extend it. But just as they are about to partake in the bipartisan peace pipe a few days before Christmas, Congress promptly grinds to a squabbling halt threatening a $1,000-tax increase for workers and the evaporation of unemployment benefits for those out of work. Merry freaking Christmas, American people! And then when it comes to explaining themselves, Democrats walk out with straight faces and blame - who else? - the tea party. … [T]he tea party supports a 12-month extension, Democrats want a two-month extension, therefore the tea party wants to kill this tax cut. Only in Washington.” http://bit.ly/tn8ad1

GOP DISSENTER – Roll Call: “Rep. Timothy Johnson [R-Ill.], who was one of only seven Republicans to vote against going to conference today, agreed, saying his caucus in particular has become increasingly harsh in its tone. ‘It appears right now that they’re relatively uncompromising. But I’m not. I try to be a compromiser … I think it’s important that we demonstrate an ability to reach out, demonstrate an ability to work across the aisle, and I’d like to see us do that.’”

ENDGAME – “Payroll tax down to who blinks first,” by Seung Min Kim and Carrie Budoff Brown: “Speaker Boehner and his rowdy Republican Conference are pressuring Democrats to come back to the negotiating table — but right now, they’re negotiating alone. And Senate Republicans are surprisingly silent on the whole thing, having washed their hands of this year-end mess by backing the two-month payroll tax extension and jetting town. … The White House seems remarkably confident four days before Christmas, waiting to see if enough pressure builds for Boehner to ultimately cave and agree to a two-month extension — perhaps with the hope of negotiating a year-long deal in the new year.: http://bit.ly/v80vWE

--BEHIND THE CURTAIN – Manu Raju and John Bresnahan: “While [Speaker Boehner and Senate Republican Leader Mitch McConnell] have been remarkably united this year, the year-end package has prompted an unusual amount of confusion, disunity, frustration and increased finger-pointing, both publicly and privately, between House Republicans and Senate Republicans over who is at fault in the political fiasco. … [S]ome GOP insiders fear they’ve ceded the upper hand on taxes and the economy to President Obama in the 2012 election year. ‘This is a colossal fumble by the House Republicans,’ said a senior Senate GOP aide … ‘Their inability to recognize a win is costing our party our long-held advantage on the key issue of tax relief. It’s time for Boehner and [House Majority Leader Eric] Cantor to look these rookies in the eye and explain how the game is won or lost.’” http://bit.ly/syuOXe

--WashPost lead by Rosalind S. Helderman and Paul Kane: “The House is gone, mostly. The Senate vows not to return. And President Obama is home in Washington while his family vacations in Hawaii, hoping for some kind of agreement between the two that he can sign.”

-- David Espo lead: “Congress-Payroll Tax, 13th Ld-Writethru: Obama blames GOP for upcoming tax increase … WASHINGTON (AP) - Continuing a tax cut of up to $40 a week for workers and unemployment benefits for millions of jobless hit a wall Tuesday as the House rejected a two-month extension of both, and President Obama blamed Republicans for the stalemate.”

TOP TALKER – WSJ 4-col. lead, “China Hackers Hit U.S. Chamber: Attacks Breached Computer System of Business-Lobbying Group; Emails Stolen,” by Siobhan Gorman: “The break-in at the U.S. Chamber of Commerce is one of the boldest known infiltrations in what has become a regular confrontation between U.S. companies and Chinese hackers. The complex operation, which involved at least 300 Internet addresses, was discovered and quietly shut down in May 2010. … Chamber officials say internal investigators found evidence that hackers had focused on four Chamber employees who worked on Asia policy, and that six weeks of their email had been stolen. It is possible the hackers had access to the network for more than a year before the breach was uncovered … The Chamber learned of the break-in when the Federal Bureau of Investigation told the group that servers in China were stealing its information …

“The Chamber moved to shut down the hacking operation by unplugging and destroying some computers and overhauling its security system. The security revamp was timed for a 36-hour period over one weekend when the hackers, who kept regular working hours, were expected to be off duty. … Chamber officials said they … determined that communications with fewer than 50 of its members were compromised. They notified those members. … [T]he emails revealed the names of companies and key people in contact with the Chamber, as well as trade-policy documents, meeting notes, trip reports and schedules.”

**A message from the National Retail Federation: We’ve been busy this year. From winning swipe fee reform to leading the charge on sales tax fairness, America’s retailers have pushed a pro-growth, pro-jobs agenda on Capitol Hill. At the top of our New Year’s List are sales tax fairness, visa reform, repeal of the employer mandate, and corporate tax reform. Want to see our playbook for 2012? www.RetailMeansJobs.com/agenda **

BIRTHWEEK: Randi Weingarten (we were reminded on time and dropped the ball) … Reid P. Kellam of Penn State is 2-0 (son of Susan Kellam and Dick Keil).

THE NARRATIVE – “US Republican candidates refocus on foreign policy,” by AFP’s Olivier Knox in Des Moines: “The sour US economy, weighed down by high unemployment, remains the top issue on voters' minds, but the candidates have made campaign fodder out of tensions with Iran, the US withdrawal from Iraq and the death of North Korea's leader.”

MITT ROMNEY’S CLOSING-ARGUMENT speech in Bedford, N.H.: “Four years ago, many Americans trusted candidate Barack Obama when he promised to bring Americans together. But now we’ve learned that President Obama’s idea of bringing us together is not to lift us up but instead to use the invisible boot of government to bring us all down. I have a vision of a very different America, an America united not by our limits but by our ambitions, our hopes and our shared dreams. I am tired of a President who wakes up every day, looks out across America and is proud to announce, ‘It could be worse.’ … If I am President I will wake up every day and remind Americans that not only must we do better but also that we can do better! I believe in America! …

“President Obama sees America differently. He believes in an entitlement society. … President Barack Obama has reversed John Kennedy's call for sacrifice. He would have Americans ask, ‘what can the country do for you?’ Just a couple of weeks ago in Kansas, President Obama lectured us about Teddy Roosevelt’s philosophy of government. But he failed to mention the important difference between Teddy Roosevelt and Barack Obama. Roosevelt believed that government should level the playing field to create equal opportunities. President Obama believes that government should create equal outcomes. … This election, let’s fight for the America we love. We believe in America. Thank you. God bless you. And God bless the United States of America.”

THE BATTLE FOR IOWA: “Source: Vander Plaats asked Bachmann to quit,” by Reid Epstein: “The phone call took place Saturday, three days before Vander Plaats announced he – but not his organization, the Family Leader – was backing Santorum. Bachmann declined, the source said, noting to Vander Plaats that she has consistently polled ahead of Santorum in the race and still does.” http://bit.ly/rAceF9

GINGRICH --Des Moines Register, “Newt Gingrich to gay Iowan: Vote for Obama,” by Jason Clayworth: “‘I asked him if he’s elected, how does he plan to engage gay Americans. How are we to support him? And he told me to support Obama,” said Scott Arnold, an associate professor of writing at William Penn University.’ Arnold, a Democrat, said he came to the event at Smokey Row coffee house with an open mind. But he wanted to ask Gingrich about how he would represent him as president after reading past comments the former U.S. House Speaker as made about gay and lesbians.” http://dmreg.co/rv1BU1

ROMNEY: N.Y. Times A24, “Remembering ‘08 Fizzle, Romney Puts Added Emphasis On New Hampshire,” by Ashley Parker and Michael Barbaro in Bedford, N.H.: “Four years ago, during his first presidential run, Mr. Romney’s lead in New Hampshire fizzled as he seemed to take his eye off the Republican primary here, pouring significant time, money and manpower into the Iowa caucuses. After a second-place finish in both states, his campaign for the White House was all but over. … A major sign of that push: Mr. Romney’s spending on campaign commercials in New Hampshire has climbed to about $372,000 from zero over the past three weeks — more than any of his Republican competitors during the same period, according to a rival campaign that is tracking media buying.” http://nyti.ms/tmd4DR

JOHNSON: “Johnson to run as Libertarian,” by Reid Epstein and Ginger Gibson: “The former two-term New Mexico governor, whose campaign for the GOP nomination never caught fire, will make the announcement at a press conference in Santa Fe on Dec. 28. Johnson state directors will be informed of his plans on a campaign conference call Tuesday night, a Johnson campaign source told POLITICO. … Johnson on the ballot would help Obama win New Mexico, typically a swing state, by a 17-point margin, [Public Policy Polling] found.”

THE PRESIDENT’S DAY: At 10:30 a.m., “the morning, the President will receive the Presidential Daily Briefing and meet with senior advisors in the Oval Office.”

MEDIAWATCH – HuffPost, “Marcus Brauchli, Washington Post Editor, Gathers Veteran Staffers To Steady Uneasy Newsroom,” by Michael Calderone: “On Dec. 4, Brauchli, who arrived at the Post only three years ago, invited a half-dozen Post loyalists for lunch at his home to discuss the current state of the paper and how they might contribute more in 2012, according to sources with knowledge of the meeting. Brauchli invited three Post veterans, Bob Woodward, David Maraniss and Rick Atkinson, who primarily write books these days (even though the former two retain ‘associate editor’ titles). Also, national security reporter Dana Priest, chief correspondent Dan Balz and enterprise editor David Finkel were on hand that afternoon for sandwiches and chips at the Brauchli home. … Maraniss, whose long-awaited Barack Obama biography will be published in June, has recently attended meetings with the paper's politics staff, in another sign of bringing veterans a bit more into the fold. ‘I intend to work with many of the younger reporters at the Post in helping shape their political stories,’ Maraniss added.” http://huff.to/v9RMrl

--Christina Bellantoni (friend of the show!) emails friends and colleagues: “[O]n Jan. 2, I will be joining PBS NewsHour as Political Editor. … I will be a contributing political columnist for Roll Call, and I wish the paper enormous success … I'm so grateful they allowed me to open a Cambridge bureau and work for three months from up there during my Harvard fellowship. … Cheers, Christina Bellantoni, Associate politics editor, Roll Call … @cbellantoni.”

– Chicago Tribune p. 1, lower-right corner, “Sale of Sun-Times to local group looms: Sources say announcement that newspaper chain gaining another new owner expected Wednesday,” by Robert Channick, Michael Oneal and Becky Yerak: “The sale of Chicago’s No. 2 newspaper is imminent, sources close to the situation said. Sun-Times Media is expected to announce Wednesday that it has struck a deal to be bought by a group of local investors led by Michael Ferro, chief executive of Chicago-based Merrick Ventures, a technology holding company. The group also includes John Canning, chairman of Chicago-based private equity firm Madison Dearborn Partners. The new group plans to name Timothy Knight, the former publisher and CEO of Newsday, which was once controlled by Chicago-based Tribune Co., as CEO of its holding company.”

--CORRECTION: Andrea Stevens was an Arts editor, not reporter, as she was described in a N.Y. Observer item on buyouts that we quoted yesterday.

**A message from the National Retail Federation: From Main Street to Macy’s, NRF represents the millions of retailers that drive America’s economy. With a successful 60-day push to implement swipe fee reform and the launch of an unprecedented campaign to promote the value of the retail industry, 2011 has been quite a year at NRF. As we look ahead to 2012, retailers will continue to fight for critical reforms on issues including sales tax fairness, corporate tax reform and health care policy, as well as to highlight the importance of retail to the economic recovery. www.RetailMeansJobs.com **

****** A message from the Coalition for Affordable Prescription Drugs (CAPD): The high prices that drug makers set for prescription drugs can put financial strain on patients, employers, unions and others who provide health care coverage to more than 50 percent of Americans. Pharmacy benefit managers negotiate the lowest net price for prescriptions on behalf of employers, unions and government programs. But, as list prices – the starting point for those negotiations -- continue their nearly double-digit increases, the effects ripple throughout the system. The key to ensuring greater access and affordability lies in fostering greater competition. Facilitating faster reviews of generics and biosimilars, identifying off-patent drugs with little or no generic competition, and ending anti-competitive practices that keep safe, effective alternatives out of the market are also key to abating rising drug costs for patients. Learn more at affordableprescriptiondrugs.org******

Authors:

About The Author

Mike Allen is the chief White House correspondent for POLITICO. He comes to us from Time magazine where he was their White House correspondent. Prior to that, Allen spent six years at The Washington Post, where he covered President Bush's first term, Capitol Hill, campaign finance, and the Bush, Gore and Bradley campaigns of 2000. Before turning to national politics, he covered schools and local governments in rural counties outside Fredericksburg, Va., for The Free Lance-Star, then wrote about Doug Wilder, Oliver North, Chuck Robb and the Bobbitts for the Richmond Times-Dispatch, where he nurtured police sources on overnight ride-alongs through housing projects. Allen also covered Mayor Giuliani, the Connecticut statehouse and the wacky rich of Greenwich for The New York Times. Before moving to The Times, he did stints in the Richmond and Alexandria bureaus of The Washington Post. Allen grew up in Orange County, Calif., and has a B.A. from Washington and Lee University, where he majored in politics and journalism.